Our previous memo (Ref No 2008/025 dated 31 January 2008) informed members that the General Administration of Customs had announced the draft regulation on custom catagorisation scheme for enterprises. Subsequently, the General Administration of Customs has promulgated the "Administrative Measures on Catagorisation of Enterprises by the Customs Authority", which will take effect from 1 April 2008.

Under the new measures, enterprises are classified into five categories, namely AA, A, B, C and D based on different criteria. These criteria include compliance with laws, administrative regulations, customs rules and provisions on anti-corruption; current status of business operation; customs supervision; and statistics records. Different sets of administrative measures will be formulated and applied to the different categories of enterprises.

Take the consignors and consignees of imports and exports as an example. To be eligible for category AA classification, the enterprise must be subject to category A management for more than one year and be post over US$30 million in imports and exports (or US$10 million in the central and western regions) in the preceding year. To be eligible for category A, the enterprise must be subject to category B management for more than a year, have no record of breaking any relevant laws or regulations for one year continuously, no record of customs administrative penalty as a result of IPR infringement, no overdue taxes and fines, as well as have over US$500,000 in imports and exports and an error rate of less than 3% in import and export declaration in the preceding year. Enterprises meeting the respective criteria may file their applications with the local customs authorities via the customs office at the location where they are registered.

According to the General Administration of Customs, the authority will apply the following administrative measures to different categories of enterprises:

1.          Category A enterprises: These enterprises may submit their declarations to the local custom authority and obtain clearance at the ports (屬地報關、口岸驗放).  Customs officers will visit these enterprises to inspect the goods and undertake  customs clearance processes at the site of business.  Priority customs clearance arrangement will be made during non-office hours and holidays if necessary. These enterprises will be subject to "nominal payment" (空轉)or exempt from customs duty deposit. Priority service will be provided for filing, alteration and cancellation procedures relating to processing trade.  The customs authority will offer priority treatment regarding training and assessment requirements for staff responsible for customs clearance.

2.          Category AA enterprises: Category AA enterprises will enjoy the same measures of Category A enterprises, however the supervision over Category AA enterprises will be less stringent.  Designated officers will be appointed to handle problems relating to customs clearance.  Information contained in the electronic declaration will be verified and used at customs clearance spot. The customs authority shall not make any spot check under normal circumstances.

3.          Category B enterprises: These enterprises will be subject to regular custom inspection measures.

4.          Category C and D enterprises: These enterprises will be put under strict surveillance particularly in areas such as customs clearance inspection, application and supervision procedures relating to processing trade.

For details concerning the new measures, members may refer to the following websites:

1.          http://www.customs.gov.cn/YWStaticPage/433/6a085514.htm

2.          http://www.customs.gov.cn/YWStaticPage/1/30e5091a.htm